strategy

Doing Nothing – The Biggest Risk

There’s a well-known parable about a wealthy CEO who took an extended business trip. He left his company in the hands of his three VPs, and gave each of them a portion of the net assets to manage in his absence. Based on what he knew of their capabilities, he gave the first one, we’ll call her Pat, $50 million. The next one, Chris, was given $20 million, and the last, Joe, was given $10 million. When the CEO returned, he asked for a report of their activities and earnings during his absence. Pat proudly showed him how she had doubled the assets entrusted to her, and now she had $100 million. Chris was pleased as well to show that she now had $40 million. Joe by now realized he had fallen far short of his CEO’s expectations. He was afraid to take a risk in losing his leader’s money, after all he couldn’t afford to pay it back, so he did absolutely nothing with it. Nothing. Joe didn’t even try to increase it, or put it in an interest bearing bank account. You can imagine what the CEO did with Joe after that. He likely didn’t have a job.

Now Pat and Chris could probably tell some interesting stories about their journey to doubling their assets; things they learned along the way both about themselves and their business strategies. They likely had some failures, but they were able to effectively manage through them.

Rut vs. Risk

Joe was afraid to take any type of risk with the valuable resources he had. He simply sat on them. Hopefully he had an idea of a business strategy he could try, something he wanted to do, but unfortunately he didn’t know how to do it or was afraid to take the risk. And by doing nothing, he effectively lost ground.

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